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The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $109,000 $135,000 $177,000 Manufacturing costs 46,000 58,000 64,000 Selling and administrative expenses 32,000 36,000 39,000 Capital expenditures 42,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $9,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $41,000, marketable securities of $59,000, and accounts receivable of $125,450 ($95,000 from April sales and $30,450 from March sales). Sales on account for March and April were $87,000 and $95,000, respectively. Current liabilities as of May 1 include $14,500 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $16,000 will be made in June. Sonoma's regular quarterly dividend of $9,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $32,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.

The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $109,000 $135,000 $177,000 Manufacturing costs 46,000 58,000 64,000 Selling and administrative expenses 32,000 36,000 39,000 Capital expenditures 42,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $9,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $41,000, marketable securities of $59,000, and accounts receivable of $125,450 ($95,000 from April sales and $30,450 from March sales). Sales on account for March and April were $87,000 and $95,000, respectively. Current liabilities as of May 1 include $14,500 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $16,000 will be made in June. Sonoma's regular quarterly dividend of $9,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $32,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
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Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $109,000 $135,000 $177,000 Manufacturing costs 46,000 58,000 64,000 Selling and administrative expenses 32,000 36,000 39,000 Capital expenditures 42,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $9,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $41,000, marketable securities of $59,000, and accounts receivable of $125,450 ($95,000 from April sales and $30,450 from March sales). Sales on account for March and April were $87,000 and $95,000, respectively. Current liabilities as of May 1 include $14,500 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $16,000 will be made in June. Sonoma's regular quarterly dividend of $9,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $32,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Sonoma Housewares Inc.
Transcribed Image Text:Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $109,000 $135,000 $177,000 Manufacturing costs 46,000 58,000 64,000 Selling and administrative expenses 32,000 36,000 39,000 Capital expenditures 42,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $9,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $41,000, marketable securities of $59,000, and accounts receivable of $125,450 ($95,000 from April sales and $30,450 from March sales). Sales on account for March and April were $87,000 and $95,000, respectively. Current liabilities as of May 1 include $14,500 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $16,000 will be made in June. Sonoma's regular quarterly dividend of $9,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $32,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Sonoma Housewares Inc.
Sonoma Housewares Inc. Cash Budget For the Three Months Ending July 31 May June July Estimated cash receipts from: Cash sales $ $ Collection of accounts receivable Total cash receipts $ Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends Total cash payments Cash increase or (decrease) $ bala at beginning Cash balance at end of month Minimum cash balance Excess (deficiency) $
Transcribed Image Text:Sonoma Housewares Inc. Cash Budget For the Three Months Ending July 31 May June July Estimated cash receipts from: Cash sales $ $ Collection of accounts receivable Total cash receipts $ Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends Total cash payments Cash increase or (decrease) $ bala at beginning Cash balance at end of month Minimum cash balance Excess (deficiency) $
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